Alert-Private payrolls rose by 140,000 in February, less than expected, ADP reports
U.S. Stock Futures Await Powell Testimony and Economic Data
U.S. stock futures were subdued on Wednesday, as investors awaited the first of two days of key testimony from Federal Reserve Chair Jerome Powell and a fresh batch of economic data.
The main averages closed in the red on Tuesday, dragged down by a drop in Apple shares after a research report found that sales of the tech giant’s flagship iPhone device plunged by 24% in the first six weeks of 2024. Chip stocks were also under pressure following a Bloomberg News report that U.S. officials had placed a hurdle in front of Advanced Micro Devices’s plans to sell a processor designed for the Chinese market.
Powell’s Testimony and Market Expectations
Jerome Powell is widely expected to maintain a hawkish tilt during what will likely be closely-watched testimony to lawmakers on Wednesday and Thursday.
The Fed Chair’s grilling on Capitol Hill comes after several central bank officials have stated that they are in no rush to cut interest rates down from more than two-decade highs due to sticky inflation. Price growth in the U.S. has slowed markedly since 2022, but remains above the Fed’s stated 2% target.
Recent data has also pointed to relative resilience in the U.S. economy, giving the Fed more headroom to keep rates higher for longer. New labor market figures, including job openings numbers later today and the February nonfarm payrolls report on Friday, are set to provide more cues on that front.
After beginning 2024 with hopes that the Fed would reduce rates early in the year, markets are now widely predicting that policymakers will not roll out a 25 basis-point cut until June.
Bitcoin and Gold Market Movements
Bitcoin had erased much of its losses in early European trade on Wednesday, staying within sight of a record high as steady capital flows into U.S. spot exchange-traded funds and anticipation of a “halving” event kept buyers in play.
Consistent capital flows into spot ETFs tracking the price of Bitcoin have recently bolstered the digital asset. Investors are also eyeing the approaching “halving” event, which will see the rate of generation of new Bitcoin slashed in half, limiting fresh supply.
Elsewhere, gold prices also moved lower after rising to record highs, in a sign that traders may be looking for a safe haven as the risk of a stock market correction grows.
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